Summary Report of Consolidated Financial Results For the First Quarter Ended September 30, (All financial information has been prepared in accordance with accounting principles generally accepted in Japan.) Don Quijote Holdings Co., Ltd. Securities Code No.: 7532 Shares Listed: Tokyo Stock Exchange Address: 2-19-10 Aobadai, Meguro-ku, Tokyo Representative: Kohji Oohara, President and CEO Contact: Mitsuo Takahashi, Senior Managing Director (Phone: +81-3-5725-7588) URL: http://www.donki-hd.co.jp (s in million yen are rounded off to the nearest million) 1. Overview of Business Results and Financial Position for the first quarter of fiscal 2017 (From July 1, to September 30, ) (1) Results of Business Operations (Millions of yen, except per-share data) Net Sales Change (%) Operating Income Change (%) Ordinary Income Change (%) Three Months Ended September 30, 201,327 7.9 12,532 10.9 12,788 10.5 Three Months Ended 186,642 13.9 11,296 8.0 11,578 7.0 (Note) Comprehensive income: 8,092 million yen [5.8%] (FY 2017.6 1Q), 7,648 million yen [10.3%] (FY.6 1Q) Three Months Ended September 30, Three Months Ended Profit Attributable to Owners of Parent Change (%) Net Income Per Share (Yen) Net Income Per Share-fully diluted (Yen) 8,127 25.4 51.40 51.37 6,482 5.6 41.02 40.98 (2) Financial Position (Millions of yen, except per-share data) Total Assets Net assets Ratio of Shareholders Equity to Total Assets (%) As of September 30, 594,782 254,573 40.0 June 30, 560,568 244,547 41.3 (Reference) Equity: 237,898 million yen (as of September 30, ), 231,528 million yen (as of June 30, ) 2. Dividends Yen Three Months Ended Six Months Ended Nine Months Year Ended June September 30 December 31 Ended March 31 30 Total Year Ended June 30, - 5.00-17.00 22.00 Year Ending June 30, 2017 - Year Ending June 30, 2017 (Forecast) 5.00-18.00 23.00 (Note) Revision to the dividend forecast in the first quarter of fiscal 2017: None 3. Consolidated Business Forecast:For the year ending June 30, 2017 (From July 1, to June 30, 2017) (Millions of yen, except per-share data) Profit Net Income Net Change Operating Change Ordinary Change Attributable to Change per Share Sales (%) Income (%) Income (%) Owners of (%) (Yen) Parent Six Months Ending 415,000 7.9 26,000 1.7 26,200 1.3 16,000 12.4 101.18 December 31, Year Ending 820,000 8.0 45,000 4.2 45,500 3.9 26,800 7.5 169.48 June 30, 2017 (Note) Revision to the business forecast in the first quarter of fiscal 2017: Yes 1
4. Others (1) Significant changes in the scope of consolidation: None Newly consolidated: - Excluded:- (2) Simplified accounting methods and special accounting methods for preparation of the quarterly consolidated financial statements: None (3) Changes in accounting policies concerning preparation of quarterly consolidated financial statements 1 Changes in line with revision to accounting standards: Yes 2 Other changes: None 3 Changes in accounting estimates: None 4 Restatement: None (4) Number of outstanding shares (Common stock) 1 Number of outstanding shares (Treasury stock included) September 30, 158,135,560 shares June 30, 158,118,160 shares 2 Number of treasury stock September 30, 4,633 shares June 30, 4,633 shares 3 Average number of outstanding shares during the period September 30, 158,118,281 shares 157,991,966 shares (5) Changes in accounting policies (Application of Implementation Guidance on Recoverability of Deferred Tax Assets) The Company adopted the Implementation Guidance on Recoverability of Deferred Tax Assets (Accounting Standards Board of Japan (ASBJ) Accounting Statement No. 26 of March 28, ; hereinafter called the Implementation Guidance on Recoverability ) from the first quarter of the fiscal year under review and revised part of its accounting treatment for recoverability of deferred tax assets. As for application of the Implementation Guidance on Recoverability, the Company followed the transitional treatment stipulated in paragraph 49 (4) of the Implementation Guidance on Recoverability. The differences between the amount of deferred tax assets and deferred tax liabilities at the beginning of the first quarter of the current fiscal year in the case of applying the paragraph 49 (3) 1 to 3 of the Implementation Guidance on Recoverability and the amount of deferred tax assets and deferred tax liabilities at the end of the previous fiscal year were added to the retained earnings at the beginning of the first quarter of the current fiscal year. As a result, deferred tax assets (investments and other assets) increased by 4,890 million, retained earnings increased by 2,406 million and non-controlling interests increased by 2,484 million at the beginning of the first quarter of the current fiscal year. Implementation Status of Financial Audit This financial summary is not subject to quarterly review under the Financial Instrument and Exchange Act. Quarterly review procedures for the consolidated financial statements are being conducted at the time of the announcement of this financial summary. Explanation regarding the appropriate use of forecasts of business results The financial forecasts of business results are based on judgments and estimates that have been made using currently available information. By nature, such financial forecasts are subject to uncertainties and risks. Therefore, actual results might be significantly different from the aforementioned forecasts for a variety of reasons, including changes in economic environments related to our business, market trends and exchange rates. 2
Consolidated Quarterly Balance Sheets Assets As of September 30, As of June 30, Current assets Cash and deposits 44,003 42,894 Notes and Accounts receivable-trade 7,616 7,720 Purchased receivables 7,180 6,606 Merchandise 118,877 117,400 Other 22,657 21,423 Allowance for doubtful accounts (35) (66) Total current assets 200,298 195,977 Non-current assets Property, plant and equipment Buildings and structures, net 110,753 108,114 Tools, furniture and fixtures, net 16,467 16,616 Land 166,184 165,185 Other, net 3,286 2,137 Total property, plant and equipment 296,690 292,052 Intangible assets Goodwill 6,572 6,852 Other 10,393 10,153 Total intangible assets 16,965 17,005 Investments and other assets Investment securities 4,876 5,736 Lease and guarantee deposits 36,789 35,645 Other 40,974 15,950 Allowance for doubtful accounts (1,810) (1,797) Total investments and other assets 80,829 55,534 Total non-current assets 394,484 364,591 Total assets 594,782 560,568 3
As of September 30, As of June 30, Liabilities Current liabilities Accounts payable-trade 71,272 70,194 Short-term loans payable 3,280 1,680 Current portion of long-term loans payable 8,027 18,557 Current portion of bonds 13,116 12,686 Payables under fluidity lease receivables 7,072 7,147 Income taxes payable 4,937 5,573 Provision for point card certificates 1,421 1,327 Other 28,398 30,831 Total current liabilities 137,523 147,995 Non-current liabilities Bonds payable 82,748 76,471 Long-term loans payable 75,881 45,082 Long-term payables under fluidity lease receivables 24,740 26,876 Asset retirement obligations 5,412 5,177 Negative goodwill 418 439 Other 13,487 13,981 Total non-current liabilities 202,686 168,026 Total liabilities 340,209 316,021 Net assets Shareholders' equity Capital stock 22,391 22,382 Capital surplus 25,224 25,215 Retained earnings 192,286 184,205 Treasury shares (14) (14) Total shareholders' equity 239,887 231,788 Accumulated other comprehensive income Valuation difference on available-for-sale securities (42) 12 Foreign currency translation adjustment (1,947) (272) Total accumulated other comprehensive income (1,989) (260) Subscription rights to shares 44 23 Non-controlling interests 16,631 12,996 Total net assets 254,573 244,547 Total liabilities and net assets 594,782 560,568 4
Consolidated Quarterly Statements of Income September 30, Net sales 201,327 186,642 Cost of sales 147,103 136,964 Gross profit 54,224 49,678 Selling, general and administrative expenses 41,692 38,382 Operating income 12,532 11,296 Non-operating income Interest and dividend income 192 166 Amortization of negative goodwill 22 22 Penalty income 39 655 Other 623 295 Total non-operating income 876 1,138 Non-operating expenses Interest expenses 266 237 Bond issuance cost 151 81 Cost of claim's liquidation 144 161 Foreign exchange losses - 235 Other 59 142 Total non-operating expenses 620 856 Ordinary income 12,788 11,578 Extraordinary income Gain on sales of investment securities 215 - Other 27 - Total extraordinary income 242 - Extraordinary losses Loss on retirement of non-current assets 56 48 Loss on closing of stores 21 18 Other 1 1 Total extraordinary losses 78 67 Profit before income taxes 12,952 11,511 Income taxes - Current 5,027 3,739 Income taxes - Deferred (1,891) 210 Total income taxes 3,136 3,949 Profit 9,816 7,562 Profit attributable to non-controlling interests 1,689 1,080 Profit attributable to owners of parent 8,127 6,482 5
Consolidated Quarterly Statements of Comprehensive Income September 30, Profit 9,816 7,562 Other comprehensive income Valuation difference on available-for-sale securities (42) (272) Foreign currency translation adjustment (1,682) 358 Total other comprehensive income (1,724) 86 Comprehensive income 8,092 7,648 Comprehensive income attributable to Comprehensive income attributable to owners of parent 6,400 6,563 Comprehensive income attributable to non-controlling interests 1,692 1,085 6
Consolidated Quarterly Statements of Cash Flows September 30, Cash flows from operating activities: Profit before income taxes 12,952 11,511 Depreciation 3,805 3,478 Amortization of negative goodwill (22) (22) Increase (decrease) in provision (235) 133 Interest and dividend income (192) (166) Interest expenses 266 237 Gain on sales of investment securities (215) - Increase in notes and accounts receivable - trade (627) (1,061) Decrease (increase) in inventories (1,683) 1,920 Increase in notes and accounts payable - trade 1,245 2,117 Other, net (573) 2,638 Subtotal 14,721 20,785 Interest and dividend income received 146 137 Interest expenses paid (356) (324) Income taxes paid (5,133) (8,499) Net cash provided by operating activities 9,378 12,099 Cash flows from investing activities: Purchase of property, plant and equipment (11,772) (17,939) Proceeds from sales of property, plant and equipment 1,131 - Purchase of intangible assets (273) (101) Payments for lease and guarantee deposits (530) (214) Proceeds from collection of lease and guarantee deposits 103 45 Payment for store opening in progress (121) (728) Proceeds from sales of investment securities 945 - Payments of loans receivable (20,774) (1,050) Other, net (53) 4 Net cash used in investing activities (31,344) (19,983) Cash flows from financing activities: Net increase in short-term loans payable 1,738 1,588 Proceeds from long-term loans payable 34,040 24,100 Repayment of long-term loans payable (13,352) (2,427) Proceeds from issuance of bonds 8,349 4,819 Redemption of bonds (1,793) (2,520) Repayments of payables under fluidity lease receivables (2,350) (1,905) Proceeds from issuance of common shares 17 308 Cash dividends paid (2,688) (2,369) Cash dividends paid to non-controlling interests (583) (567) Other, net 5 16 Net cash provided by financing activities 23,383 21,043 Effect of exchange rate change on cash and cash equivalents (509) (135) Net increase in cash and cash equivalents 908 13,024 Cash and cash equivalents at beginning of period 44,496 51,292 Increase in cash and cash equivalents from newly consolidated subsidiary 64 - Decrease in cash and cash equivalents resulting from exclusion of subsidiaries from consolidation - (32) Increase in cash and equivalents resulting from change of accounting period of consolidated subsidiaries 49 - Cash and cash equivalents at end of period 45,517 64,284 7
Segment Information For the first quarter ended September 30, 1. Information concerning sales and income by reporting segment Sales, Segment income Sales Retail business Reporting segment Rent business Sub Total Others (Note 1) Total Adjustment (Note 2) Consolidated (Note 3) Sales to third parties 194,453 5,114 199,567 1,760 201,327-201,327 Intersegment sales 136 4,873 5,009 2,512 7,521 (7,521) - Total 194,589 9,987 204,576 4,272 208,848 (7,521) 201,327 Segment income 6,784 4,001 10,785 1,753 12,538 (6) 12,532 Notes 1. The other businesses segment includes the services of real estate business, marketing business and financial service business that are not included in other reporting segments. 2. The (6) million adjustment to segment income is an intersegment elimination. 3. Segment income is adjusted to the quarterly consolidated operating income. 2. Information concerning impairment loss of fixed assets or goodwill by reporting segment Not applicable For the first quarter ended 1. Information concerning sales and income by reporting segment Sales, Segment income Sales Retail business Reporting segment Rent business Sub Total Others (Note 1) Total Adjustment (Note 2) Consolidated (Note 3) Sales to third parties 180,333 4,720 185,053 1,589 186,642-186,642 Intersegment sales 3 4,318 4,321 1,773 6,094 (6,094) - Total 180,336 9,038 189,374 3,362 192,736 (6,094) 186,642 Segment income 6,686 3,255 9,941 1,563 11,504 (208) 11,296 Notes 1. The other businesses segment includes the services of real estate business, marketing business and financial service business that are not included in other reporting segments. 2. The (208) million adjustment to segment income is an intersegment elimination. 3. Segment income is adjusted to the quarterly consolidated operating income. 2. Information concerning impairment loss of fixed assets or goodwill by reporting segment Not applicable 8